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Wednesday, January 04, 2006

Strathmore finds a tiny bit of extra uranium...

...and the market goes wild!

This press release says they've upped the estimate at Church Rock to 11.8 million pound from 6 million pounds. I figure they have at least 100 million pounds of uranium ore. This adds perhaps 6% to the total. The market went up 7.33%, which I guess is rational after all (if they find a little bit more here, it seems likely they'll find more somewhere else)... except for the fact that each share represents well over 1 pound of uranium in the ground, it probably costs about $25 to extract each pound of uranium, the prices are now above $36/pound, but the stock is only selling for about US$1.75. The market should have gone wild when prices were down around US$1.00 per share.

Bruce I was wondering what you thought of ASCONI CORP NEW (ASCD.PK)

Bruce more intrestingly I was wondering what you thought of OCA inc., i thought they had an intresting business. They are in the process of reorganization, the pink sheet symbol is ocai.pk

ASCD: directors and executives own 90% of the stock. Why would they even bother being a public company? And they repriced warrants: a big red flag. Capital expenditures are enormous. Why? The SEC investigation is another huge red flag. They stopped issuing financial statements. The auditors resigned. The company withdrew its registration from 2004. A board member resigned (member of the audit committee). The last thing we see are results deteriorating in the most recent 10-Q.

It seems to me that there are some massive issues going on inside the company that are probably not very visible to outsiders.
OCA seems too complicated to be able to give any sort of quick answer. I don't expect to be looking at it because it's too difficult relative to other stuff (low hanging fruit) that I'm looking at.
Have you taken a look at Energy Metals Corporation (EMCKF aka. EMC.V)? They seem to have some similarities to Strathmore...

Just curious.
No, I haven't looked at EMC. The problem is that a mine is usually "a hole in the ground owned by a liar" as Mark Twain said. So it takes quite a unique situation for me to invest in a mining company. If I wanted another uranium investment for some reason, I'd probably pick one of the standard ones... very reluctantly.
Well, I realize there are hundreds of new "uranium mine" companies, almost all of which are crap. But EMC appears to have a history and strategy similar to Strathmore's.

I noticed EMC because it is mentioned in the same paragraph as Strathmore here:


...by an asset manager with a large position in Strathmore itself.

If "pounds of uranium per share" is our primary metric for this sort of play, EMC does seem to have a fairly sizable collection of already-explored and already-mined properties. I am thinking about diving in to make a conservative estimate, and I was kind of hoping you had already taken a peek and rejected it :-).
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